5 on the Future
We have had the Three Tenors, preceeded by the Fab Four and now have the Five Economists.
Five Maine economists forecast 2009
Five Maine economists give an initial public offering of their predictions for 2009, and take stock of the financial upheaval of 2008 and its recurring effects
By Jackie Farwell
Mainebiz staff reporter
01/19/09
Worth reading, reflecting and ruminating. 2009 will not be kind. Will the recession subside in the 2009 third quarter or remain with systemic stubbornness into 2010? A u-shaped recession is pretty well confirmed. Do these expectations reflect or create reality? Only time will tell.
Here is my take on the topics asked.
Dow Jones Industrial Average: We will spend much of the year dribbling along the bottom range between 7500 and 8500. Daily, natural, and programmed trading will set the boundaries. By the end of the year, 9000 is possible with the upward trend extending into 2010.
Energy prices: Stagnant.
Maine jobs: The excess will be shed with recovery coming from alternative energy opportunities.
What’s in store for the housing industry and mortgage rates?
Excess inventories will persist. Even with lowering prices, creating increased underwater mortgages, the tenuous jobs situation will prevent buyers and lenders from creating any desired momentum.
What will be the effect in Maine of the Federal Reserve slashing interest rates?
Negligible Until the excess leverage inventory is reduced, the job market returns, toxic assets are moved into holding companies, and consumer confidence is restored. Americans are turning away from credit to cash for the expenses of daily living. Interest rates for the time being will remain less relevant.
Will we see any relief from the recession in 2009?
Yes, towards the end of the year. Once the tsunami waves of foreclosures subside and the depth of the overleveraged of America is dealt with. Then we will know what our collective obligations, can program the increased costs into our personal budgets, and adjust spending to pay for prior excesses. We The People are all in this together.
How do you see the effects of the recession in your daily life?
Yes. Folks at work are cutting back their 401k contributions, pay freezes are in effect. I am holding onto my cash reserves until the muddy waters run clear.
What challenges will be unique to Maine in 2009?
Maine lives at the end of America’s road to east. The recission was slower to get here, but will linger longer until actions are taken to restore our productive manufacturing base. We need a balance of job sectors to sustain growth opportunities.
What’s been overlooked?
Alternative energy opportunities. The recent slump with oil prices will not last or endure. Energy efficiency improvements, while laudatory are only a bridge towards independence. Unless we continue to make supply source improvements towards geothermal, wind, tidal, and solar, this bridge may be the bridge to nowhere.
Any bright spots?
We are Americans. With President Obama’s leadership, responsibility and accountability can be restored.
